Clearstream Facilitates Use Of Structured Securities As Collateral

Clearstream has launched a new service element allowing clients to better use structured securities pledged as collateral thus allowing them to optimize their collateral allocation. The improvement strengthens Clearstream’s leading position in the Tripartite Collateral Management area.

The new functionality allows customers to set specific collateral selection criteria for structured securities such as asset backed securities and mortgage backed securities. In addition Clearstream has introduced a flexible and dynamic additional haircut figure in line with the counterparty expectation to ensure a fair value calculation for the underlying collateral. This will help manage the value variation overtime of structured securities for which there is no liquid market. Consequently, the allocation of available collateral can be expanded significantly depending on the portfolio structure.

“Asset backed securities and mortgage backed securities are becoming more and more important in the collateral world”, says Volker Potthoff, Managing Director, Clearstream Banking. This new service element offers additional flexibility for collateral segmentation and further increases the attractiveness of the Tripartite service package offered by Clearstream.”

Clearstream’s Global Securities Financing suite of products provides customers with easy and cheaper access to Clearstream’s pools of securities and cash liquidity, thereby increasing settlement efficiency and lowering financing costs.

On September 21 and 22 Clearstream will hold its 10th Global Securities Financing Summit in Luxembourg. This event has become the largest gathering of participants from the international repo and collateral management community in the world.